Pilbara Minerals' board had exercised an option to manufacture battery-making materials with steel-maker POSCO by setting up a lithium processing plant in South Korea.
Pilbara will have a 30 percent participation in the facility, which will be constructed in the Gwangyang Free Economic Zone, by late 2020. The capacity will be up to 40,000 tpa LCE. Earlier this year, Pilbara said it agreed to sell about 240,000 tonnes of lithium concentrate a year to POSCO.
Pilbara said lithium hydroxide will be produced at the facility using POSCO’s patented PosLX purification process.
POSCO has not disclosed details of the process, but looking to the patents allows to give an assessment. Originally, the PosLX process has been developed for brines, but in fact was unsuitable for it, because purification of magnesium, calcium and boron need high pH's and was completely uneconomical. The characteristic of the process is the precipitation of very low soluble lithium phosphate by adding sodium phosphate to the process stream. Lithium phosphate must be dissolved again with de-ionidized water and is then split into lithium hydroxide by electrolysis. Saying this, I feel that the process is not cheap, but feasible for solutions from spodumene concentrate, if certain purity requirements are fulfilled. Because POSCO has piloted the process for several years now, most likely technical hurdles have been overcome.
The formation of the joint venture is a good deal from my perspective.
For Pilbara, access to POSCO’s proprietary technology is important. This allows Pilbara to participate in the higher-margin business of battery-grade lithium salts. The spodumene concentrate business is a commodity business and provides only limited opportunities for establishing USP's. POSCO will get access to an established spodumene resource and secure raw materials.